The desire for wealth is something that most Americans are raised with. From the time many are young, there is parental talk of having money, getting money, keeping money. Many have memories of parental ?get rich quick? schemes or savings accounts that are never quite full. As a young person, you?ve likely begun to develop your own experiences relating to the acquisition of money. Just as likely, you?ve fallen victim to the same types of mistakes we?ve been making for ages.
Mistake One: Playing the Lottery
As Jason Hartman points out, there is no room in sound investing for gambling. Many Americans play the lottery religiously?a scratch ticket with every stop at the grocery store or gas station, a Powerball ticket twice per week. Over time, these tickets add up.
Sure?it only takes one winning ticket to make it big, and you?ve heard everyone who regularly buys tickets make this claim. But the odds are always very much against it. Buy a ticket once in awhile, for fun. Still, never expect that this is ?your week? every week?you?ll end up pouring money you could have otherwise invested or put into savings into a tiny piece of losing paper.
Mistake Two: Tiny Luxuries
If you dine out a lot, chances are, you?re spending above your means. If you?re ordering alcohol or soda, your expenses are even greater. While these experiences are always fun, consider eating first and joining friends for one drink, saving yourself a bit of money. Or, offer to host a potluck style dinner for friends or family. This way, everyone saves a bit of money and you don?t neglect fun and adventure.
Also, skip that soda or candy bar at the gas station or vending machine. You?ve probably got food at home and you?re almost there anyway. These small luxuries add up over time and are usually not worth it.
Mistake Three: Years of Rentals
When you first move out of your parent?s house, it makes a lot of sense to rent. Over time though, you?re spending a lot of money on a place to live, and you?ve got nothing to show for it. You probably know a lot of people in the same boat?they?re sick of paying rent to landlord?s who have rules about painting/decorating/pets.
If you?ve been smart with your money (see mistakes two and three) you?ll perhaps be able to invest in rental property. And, lucky for you, you?ve got a number of friendly tenants to occupy your space. Who says you can?t mix business with pleasure? (photo credit: Ed Yourdon via photopin cc)
The Young Wealth Team